Fremman Capital has bought an agency that hires NHS doctors, nurses and other staff outside of their contracted hours. The firm is betting that the growing number of waiting lists will increase demand for specialized services and staff.
Volpi Capital has sold UK-based Medinet to Fremman Capital, for an undisclosed amount. Medinet is a company that helps NHS organizations reduce waiting times.
Private equity is expanding its reach within the UK Health System. It has expanded to include private hospitals, recruitment agents, child care and elderly care, foster, and mental health services. Volpi, Fremman and Foster did not respond when asked for comments.
Medinet’s deal comes at a time of acute NHS staff shortages and a wave industrial actions by employees who are demanding higher wages. Nearly 48,000 junior physicians are planning a five-day walkout, the longest in history.
Medinet is among the approximately 20 companies that offer “insourcing”, where agencies sign up NHS employees and find them to work outside of their normal hours in order to treat patients at NHS premises. Summit Partners, a US private equity firm, bought Medinet’s competitor, 18 Week Support last year.
Michelle Tempest of consultancy Candesic said that NHS trusts were increasing their insourcing and outsourcing. She added that this trend would continue to grow as NHS trusts seek quick solutions for staff shortages.
According to Candesic, an independent consultancy, the NHS spent £55mn in 2022 on its own staff doing extra work via specialist agencies, compared to PS62mn last year. Insourcing services was most popular in the departments of general surgery, gastroenterology, and endoscopy last year.
NHS England, the national service provider, has criticised the practice. The NHS England has stated that it “discourages” the practice of insourcing, because it “doesn’t provide any extra staff”.
NHS England stated that agency workers are also paid at higher rates. This has a “ripple-effect” and forces other departments to increase pay.
According to Companies House, Medinet reported revenues of £58.9mn in the past year. This is a 93% increase from the previous year.
The company’s annual report stated that “Waiting Times in the NHS in the UK continue growing and demand for its services will likely grow.”
The NHS still has a backlog from cancelled appointments during the pandemic, which led to a record-breaking demand for services last summer.
According to NHS data, in April, more than 371,000 patients waited for over a year before receiving treatment.
Fremman Capital, founded in 2020, was created by former Merrill Lynch and PAI Partners executives. The firm owns a number of companies, including Kids Planet UK, which is one of the UK’s largest nurseries.